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- Thinking Ahead Issue 4
SUBMISSION TO TAX OFFICE SAVES COMPANY $85,000
Unforeseen events can place significant stress and burden on both your business and its people, and keeping up to date with tax obligations can quickly spiral out of control.
Matthew Wingrave, Manager, Bentleys Adelaide
We saw this scenario with one of our clients recently. But through hard work they were able to turn things around.
In 2009 the managing director of a transport company was involved in a serious work accident which left him incapacitated for 12 months. Because the managing director was significantly hands-on and personally carried much of the knowledge of the business, his absence put serious pressure on the company’s operations, its cashflow and compliance obligations. So much strain was placed on the company that the lodgement and payment of liabilities on business activity statements (BAS) became outstanding by some 12 months.
Bentleys worked with the client to prepare budgets and cashflow forecasts. The company froze further capital acquisitions and payment arrangements were made with the Tax Office to eliminate the debt owing to it. Our client showed great commitment, dedication and focus on rebuilding the business. The Tax Office debt was fully repaid within two years. This was achieved while keeping up to date with all continuing obligations to the Tax Office.
Our client co-operated fully and proactively with the Tax Office making every attempt to settle its debt as soon as possible. This placed us in an excellent position to request a full remission from the Tax Office of general interest charges imposed on the debt.
Our submission to the Tax Office was based not only on the unfortunate personal circumstances of the managing director, but also the application of the company in continuing to meet its obligations in a timely manner. The Tax Office was suitably impressed with the behaviour of the company and remitted the full amount of general interest charges of $85,000.
This case study underlines the importance of both clients and tax agents being proactive with the Tax Office so far as debt management is concerned. It illustrates the important role a tax agent can play in negotiating a commercially acceptable solution in these situations.
Think Ahead. Talk to Bentleys Today.
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